Friday, March 8, 2013

Dow Theory Update for March 8: Stocks make higher highs

Gold and
silver up

The SPY,
Industrials and Transports made higher highs. Thus, the primary bull market has
been re-confirmed once again. The primary and secondary trend remains bullish.

Today’s
volume receded as stock prices advanced, which has a bearish connotation. My overall
assessment of volume continues bearish short term for the reasons given here. However, as I have explained countless times in this Dow Theory blog, volume merely serves to qualify trends. In other words, trends are made by prices and you can go broke because your stock goes down, even if it declines on negligible volume. Thus, volume merely increases o decreases the odds of a trend (or reversal) to occur. Thus, a bullish trend confirmed by volume has better odds of continuing than one not supported by volume. Nevertheless, the final verdict is given by price action.

Here you have
an updated chart reflecting price and volume patterns.

Volume still bearish short term

Gold and
silver

GLD lost
yesterday, March 7, almost two tonnes. The bleeding continues, albeit more
mitigated.

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This blog (dowtheoryinvestment.com) is strictly a personal journal applying my interpretation of Dow Theory principles to the action of the stock market and my musings about investment and trading in general. This blog is intended solely for entertaining, illustrative or informational purposes. I am not a registered investment advisor and neither the information nor the opinions expressed should be construed as a solicitation to buy or sell any stock, option, ETF, mutual fund, currency, commodity, or any other security. I am unaware of any readers personal circumstance, financial condition, risk tolerance or goals and objectives, so nothing read here should be considered advice suitable for them. Anyone reading this blog does so with the understanding that this is strictly meant as an analytical exercise and does not proffer actionable advice in any way, shape or form. Trading and investing always entail risk and possible loss of funds and should only be undertaken after appropriate due diligence by the trader/investor and after consulting a registered investment adviser.